AI and Financial Regulation: Cascades, Crashes, and Causation - guest post from Jonathan Iwry

As part of our series on AI Risk Management and Financial Regulation, Jonathan Iwry explores questions of responsibility and automation in a world of artificial intelligence.

AI automation and responsibility

On the morning of April 7, 2025, a false headline about a potential pause in the President’s tariffs began circulating on social media. Within minutes, it was picked up by a widely followed account, repeated on CNBC, and relayed by Reuters. Automated trading systems reacted immediately, driving the stock market up by $2.4…